10-K: Vestiage Inc. Files Form 10-K, Reports Net Loss and Going Concern Uncertainty

Vestiage, Inc. reports a net loss of $52,675 for the year ended December 31, 2024, and expresses substantial doubt about its ability to continue as a going concern.

Summary

• Vestiage, Inc., a developmental stage company focused on mergers and acquisitions, filed its Form 10-K for the year ended December 31, 2024.
• The company reported a net loss of $52,675 for the year ended December 31, 2024, compared to a net loss of $48,929 for the year ended December 31, 2023.
• Operating expenses decreased to $52,675 in 2024 from $56,677 in 2023.
• The company had no revenue for the years ended December 31, 2024 and 2023.
• Vestiage disposed of its subsidiary, Fun Fitness Corporation (FFC), on December 31, 2023, recognizing a gain of $7,748.
• The company's auditor has raised substantial doubt about its ability to continue as a going concern due to recurring losses, a deficit in equity, and the need to raise additional capital.
• As of December 31, 2024, the company had no cash and a working capital deficit of $110,370.
• A change in control occurred on August 25, 2023, with Well Profit Holdings Limited acquiring a controlling stake in the company.
• The company is seeking potential business combination opportunities but has no definitive agreements at this time.
• Management acknowledges material weaknesses in internal control over financial reporting.
• The company is subject to the Exchange Act and the Sarbanes-Oxley Act of 2002.

Sentiment

Score: 3

Explanation: The document presents a negative outlook due to the company's net loss, going concern uncertainty, and material weaknesses in internal control. While the company is actively seeking a merger candidate, the overall financial situation is precarious.

Positives

• Operating expenses decreased slightly from $56,677 in 2023 to $52,675 in 2024.
• The company recognized a gain of $7,748 on the disposal of its subsidiary, Fun Fitness Corporation (FFC).
• The company is actively seeking a suitable merger candidate to implement its business plan.

Negatives

• The company reported a net loss of $52,675 for the year ended December 31, 2024.
• The auditor has expressed substantial doubt about the company's ability to continue as a going concern.
• As of December 31, 2024, the company had no cash and a working capital deficit of $110,370.
• The company has not generated any revenue for the years ended December 31, 2024 and 2023.
• Management acknowledges material weaknesses in internal control over financial reporting.

Risks

• The company's ability to continue as a going concern is dependent on raising additional funds and implementing its business plan.
• The company faces competition in its efforts to locate a suitable merger candidate.
• The company's management has limited experience in acquisition of companies.
• Material weaknesses in internal control over financial reporting could adversely affect the company's ability to record, process, summarize, and report financial information.
• The company may be subject to increased US and China governmental regulations following a transaction.

Future Outlook

The Company expects to continue to incur moderate losses each quarter until a transaction considered appropriate by management is effectuated and hopes to raise capital in order to fund the acquisitions.

Management Comments

• Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an effect on the Company's financial results.
• Management believes that the lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures can result in the Company's determination to its financial statements for the future years.

Industry Context

As a developmental stage company seeking a merger or acquisition, Vestiage is competing with numerous other entities, including SPACs, venture capital firms, and investment banks. The company's success depends on its ability to identify and secure a suitable business combination opportunity in a competitive market.

Comparison to Industry Standards

• It is difficult to compare Vestiage to industry standards due to its developmental stage and lack of revenue.
• Many shell companies or companies seeking acquisitions often have limited operating history and financial data, making direct comparisons challenging.
• SPACs, for example, are often compared based on the size of their initial public offering and the industry they are targeting for acquisitions.
• Vestiage's small size and limited resources may put it at a disadvantage compared to larger, more established companies in the M&A market.

Management Changes

Corporate Governance

Related Party Transactions

• Mr. Raymond Fu, Officer and Director of the Company, have advanced working capital to pay expenses of the Company.
• The advances are due on demand and non-interest bearing without maturity date.
• Small Cap Compliance, LLC (SCC) former controlling shareholder of Vestiage, Inc., and Rhonda Keaveney, former sole Officer and Director of the Company, is also the owner of SCC and fonder of Fun Fitness Corporation (FFC), the Companys subsidiary.
• She is also the sole Officer and Director of FFC and former owner of FCCs outstanding Preferred A shares.
• SCC have advanced working capital to pay the Companys expenses, which includes transfer agent fees and accounting fees.
• The outstanding amounts were transferred to Mr. Raymond Fu upon change of control of the Company on August 25, 2023.
• On August 25, 2023, the Company issued 305,000,000 shares of Restricted Common Stock to Well Profit Holdings Limited as part of the change of control.
• The outstanding amount due to related parties was $87,525 and $56,842 as of December 31, 2024 and 2023, respectively.

Stakeholder Impact

• Shareholders face the risk of dilution and potential loss of investment due to the company's need to raise additional capital.
• Employees may be impacted by the company's financial instability and potential changes in management.
• The company's ability to attract and retain customers and suppliers may be affected by its going concern uncertainty.
• Creditors face the risk of non-payment due to the company's financial difficulties.

Next Steps

• The company intends to improve its financial organization by creating a position to segregate duties and increasing personnel resources and technical accounting expertise.
• The company plans to appoint one or more outside directors to its board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures.
• The company plans to prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
• The company intends to adopt an insider trading policy by the end of 2025.

Key Dates

Keywords

merger, acquisition, financial transactions, going concern, internal control, Form 10-K, Vestiage, loss, OTC